In the current funding period, we investigated the function and mechanism of action of a novel protein isolated in our laboratory, the Nuclear Factor of Activated T cells (NFAT) cofactor protein, NIP45. In earlier studies, we had discovered that NIP45 greatly augmented the production of IL-4 and together with the transcription factors c-Maf and NFATc2 conferred on non-producer cells the capacity to express endogenous IL-4 at levels equivalent to Th2 cells. Under the aegis of this grant, we discovered the mechanism by which this occurs. NIP45 is arginine methylated, facilitating its interaction with the NFAT transcription factor. The most abundant mammalian arginine methyltransferase, PRMT1, is situated downstream of the TCR in progenitor Th cells. Blockade of PRMTs with methyltransferase inhibitors diminished cytokine production. The major substrate of PRMT1 is not NFAT itself but rather NIP45. PRMT1 specifically methylates arginine residues in the amino terminus of NIP45, a modification that facilitates its association with NFAT and hence explains its ability to alter cytokine gene expression. The importance of posttranslational modification of proteins in regulating gene expression has gained increasing recognition but the role of arginine methylation regulating cytokine gene expression had not been previously known. Covalent modifications allow mature T lymphocytes to react rapidly upon T cell receptor ligation to instigate genetic programs appropriate to the type and magnitude of immune response required. The positioning of the methyltransferase PRMT1 downstream of the TCR suggests that arginine methylation may be an especially important posttranslational modification in lymphocytes. In the next funding period, we wish to continue our work on establishing the function of NIP45, taking advantage of our recently created line of NIP45 deficient mice, and to explore a broader role for arginine methylation in the immune system.